Canada’s greenhouse gas regime is poised to be one of the country’s leading business challenges in 2016. From Paris to provincial legislatures, big changes are coming, with Canadian companies – and large carbon emitters across a range of industries – still determining what the impacts will be on their bottom lines.

Nationally, there will be significant changes to Canada’s energy systems and economy, heavily weighted in natural resources. With green energy sources likely to play a larger role, experienced renewable project developers with strong balance sheets and a low cost of capital are likely to be some of the biggest winners in 2016.

In Alberta, Premier Rachel Notley announced a far-reaching and comprehensive climate change strategy, with sweeping new regulatory requirements for the electricity, oil and gas industries.  The result for a province already reeling from low commodity prices is an economy-wide carbon tax, a 100 megatonne cap on oil sands emissions and a phase-out of coal. Ontario has proposed a cap and trade program, to take effect in 2016, which will be its primary vehicle to achieve emissions targets. Depending upon the industry, new policies in Edmonton and Ontario may reflect an operational cost, a barrier to entry or a reason to shut down entirely.

Companies with emissions-reducing technologies, or venture capital/private equity focused on renewable and energy efficiency project financing are currently well-placed for success. However, even outside of Alberta, de-carbonization and structural changes to the oil and gas industry will have significant commercial implications, for example, on manufacturers in Central Canada, large energy consumers and overall currency valuation.

In the upcoming year, business will look ahead to not only the implementation of provincial carbon initiatives, but also to the federal government pursuing its own climate change agenda. This involves new international obligations arising from the 2015 United Nations Climate Change Conference, as well as a commitment to set national emissions targets. 2016 will therefore be a watershed year for Canadian business in navigating the shoals of carbon policy and economic transition. Changes are expected to be rapid and multi-dimensional, effects complicated.